Shandong Iron and Steel Group (SISG)'s Court order cripples African Minerals « Awoko Newspaper

Sierra Leone News: SISG’s Court order cripples African Minerals

The Chinese Shandong Iron and Steel Group (SISG) which owns 25% shares in African Minerals last week Thursday 26th February obtained two High Court (Sierra Leone,) orders the first of which could force the company into bankruptcy, and the second which prevents the miner from entering bankruptcy thus effectively crippling its operations.
On Thursday 26th February SISG, via one of its units, took over ownership of a $250 million pre-export finance facility from African Minerals’ bank lenders that has been in default since November.
SISG then went on to demand “immediate repayment” of the $166.7 million still outstanding from the iron ore miner. On the same day, the SISG unit also sent an email with an interim order from Sierra Leone’s High Court of Sierra Leone relating to African Mineral’s shareholders agreements with SISG.
The email contained a temporary court injunction which restrains the defendants (Tonkolili Iron Ore (SL) Ltd, African Railway & Port Services (SL) Ltd, African Power (SL) Ltd, AML and Frank Timis) from unilaterally taking any steps that will lead to the dissolution, liquidation, winding up or placing into administration of any of the defendant companies.
The injunction, which has been extended, continues until the hearing and determination of intended or proposed arbitration proceedings.
In a release posted on the company’s website, AML states that “Following the events announced last week and earlier this week, and further discussions with Shandong Iron and Steel Group (“SISG”), the Board has concluded that there is no reasonable prospect of it being able to achieve a negotiated solution with the Group’s secured lender and the 25% shareholder in Tonkolili Iron Ore (SL) Ltd and African Railway and Port Services (SL) Ltd (the “Operating Companies”).”
The release went on “The secured lender and the 25% shareholder in the Operating Companies are both now under the control of SISG.”
The release then pointed out that “The Board of African Minerals Limited has decided to apply to appoint administrators of the Company.”
“The Company is working to identify an appropriate insolvency practitioner to represent and protect the interests of the creditors and stakeholders of the Company.”
As a result of this decision AML’s Nominated Adviser and Broker, Jefferies International Limited, has resigned with immediate effect. Failure of the Company to appoint a replacement Nominated Adviser within one month will result in cancellation of the listing of its shares on AIM.
“The future of the Operating Companies, and their ability to pay creditors, obtain funding, and restart operations, is now entirely in the hands of SISG.”
“Any further support or interaction between the Operating Companies and AML, including transfer of any staff and assets, and resolution of financial aspects, must be negotiated between SISG and the administrators, once appointed.”
Friday March 13, 2015

Sierra Leone News: SISG’s Court order cripples African Minerals « Awoko Newspaper